How Many Types of Business Insurance Are There and Which Ones Do I Need?

Business insurance helps business owners protect their companies from financial losses. Without coverage, a business owner can be held liable and financially responsible for accidents, property damage, professional errors, theft, and lawsuits. 

Just like any type of insurance, business insurance policies vary in price and coverage. At Lincoln Brokerage, we know that every business is unique. That’s why we offer many types of business insurance policies. Keep reading to learn why business insurance is something you should consider and how to go about getting a policy.

Why Do I Need Business Insurance?

There are many reasons to consider business insurance. And the reasons for one business might not be the same as another. So to dive into this question a bit further, here are three reasons why your business may benefit from an insurance policy.

Legally required

Not all types of business insurance are required. But if your business doesn’t currently have a type of policy required by New York or federal law, you’re at risk for fines, penalties, or even “cease and desist” orders. New York currently requires any business with employees (including contractors) to obtain workers’ compensation and disability benefits insurance. Auto insurance is also required for companies with business vehicles. 

High litigation risks

Research shows that up to 53% of small businesses are sued in a given year. If your business has been able to avoid litigation so far, your days are likely numbered. And with the cost of a lawsuit ranging from $3,000 all the way to $150,000, the consequences of not having business insurance can be financially devastating.

Avoid progress stalls

All businesses experience hiccups now and again. While small hiccups can be quickly overcome, big ones can completely stall business growth. What would happen if your office flooded tonight? Would a theft at your warehouse leave you unable to fulfill orders? How would a lawsuit affect your reputation (and bottom line)? 

A business insurance policy can provide compensation for expenses, like rent and utilities, along with lost income. This type of coverage helps you overcome big business hiccups much faster.

Business Insurance Questions to Ask

Deciphering what types of business insurance offer the best protection for your company’s unique needs can get confusing. So before looking at all the different policies on the market, ask yourself the following questions to get a head start on narrowing down your options.

What type of business do I run?

The answer may seem obvious to you, but when it comes to an insurance policy, it’s not just about your industry. It’s about the specifics of your business, all which carry their own unique risks. For example, both a hibachi restaurant and a street taco food truck fall into the food and beverage industry, but their coverage needs aren’t exactly identical.

How many employees do I have?

Do you have a large staff or are you running solo? There are certain business insurance policies that are legally required if you have employees (including contractors). If you do need certain types of business insurance, like workers compensation coverage, knowing the number of currently employed staff on your roster can help a broker negotiate policy prices for you.

What am I most worried about?

Not all types of business insurance are required. But because some may be more important to your industry than others, knowing what risks are common along with those you’re personally concerned about can help a broker come up with a custom set of policies that will leave you feeling fully protected.

Top 8 Types of Business Insurance

Ready to start shopping for a business insurance policy? Here are the most common types to consider (and they’re all available through Lincoln Brokerage).

Workers Compensation Insurance

If your Brooklyn business has employees, you’re required to carry worker’s compensation insurance. This type of coverage provides medical, rehabilitation, and disability benefits to employees injured on the job. Failing to provide this coverage can result in costly fines.

Statutory Disability

This is another type of New York business insurance that is legally required if you have employees. However, this applies to injuries that occur off the job. Paid Family Leave coverage is also part of this policy.

Professional Liability

This insurance is not required in New York but it’s one of the most important on our list. Without it, professional advice or service-providing business has very little protection from negligence claims and lawsuits. Depending on the industry, it may be a requirement listed in a contract with another business.

Commercial Auto Insurance

Your business doesn’t need to have branded vehicles used exclusively for work-related tasks to qualify for commercial auto insurance. If you ever rent a car, hire a driver, or ask an employee to use their car for a quick business errand, you may benefit from this coverage.

Commercial Property Insurance

While many business owners worry about covering employee injury, being able to pay for a legal team if a client sues, or inventory reimbursement from theft, not enough worry about their company’s physical property. Take the time to explain the true value of your building and other property assets to your broker to ensure everything is properly covered.

General Liability Insurance

We live in a litigious world. You can’t guarantee your business won’t face a lawsuit one day and attorneys aren’t likely to lower their fees anytime soon. For these reasons, general liability insurance is almost always a recommended policy.

Employment Practices Liability

Employees can feel disrespected by management, even if there was no ill intent by the latter. With this type of policy, you’ll be financially protected from claims related to sexual harassment and failure to promote.

Cyber insurance

The average cost of a data breach is $3.86 million. While a cyber insurance policy can’t help prevent a breach, it can help with any associated fall out. This could include legal services, the cost of notifying customers, lost income, and any resulting lawsuits.

How Do I Get Business Insurance?

Obtaining business insurance is just one simple phone call away. But before you get ahead of yourself, go through this checklist to make sure you end up with the right types of business insurance.

  • First, gather important information and applicable documents. These could include reports on gross annual sales, number of employees, payroll size, and company assets. You’ll also want to have basic information, like the company’s address, and industry description handy.
  • Next, work with a broker who specializes in business insurance. At Lincoln Brokerage, we only work with certain types of insurance policies. Business insurance just so happens to be one.
  • Once you’re working with an experienced business insurance broker, discuss your coverage needs in detail. In order to get the best and most comprehensive coverage, you’ll need to be as honest as possible.
  • Finally, evaluate your options. Ask as many questions as you need to. And then choose a business insurance policy that best fits your needs and budget.

At Lincoln Brokerage, we make getting insurance for your business easy. We understand that all types of business insurance policies need to be built for the specific businesses they cover, not just cater to generic industries. To learn how we can put together a custom insurance package for your business, reach out to a broker for more information today.

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